Growth In Medicare Spending Per Beneficiary Continues To Hit Historic Lows

Exhibit 1. Annual Increase in Medicare Spending Per Beneficiary and GDP Per Capita
  2010 2011 2012 2010-2012 Average
Note: 2012 statistics are on a fiscal year basis, because calendar year data are not yet available.
Source: Medicare spending for 2010 and 2011 from the 2012 Trustees Report;  Medicare spending for FY 12 from OACT; GDP per capita for 2010 and 2011 from the CMS National Health Expenditures data published in Health Affairs, January 2013; GDP per capita for FY 12 calculated from BEA and Census data.
Medicare Spending per Beneficiary 2010 1.8% 3.6% 0.4% 1.9%
GDP Per Capita 2.9% 3.2% 3.4% 3.2%

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Exhibit 2. Projected and Historical Annual Growth Rates of Medicare Spending Per Beneficiary in Excess of GDP
  No SGR Fix SGR Fix 1970-2010
Source: Medicare Spending Per Beneficiary from 1970-2010 from OACT data on incurred costs; GDP per capita for 1970-2010 from BEA historical data; 10 year future projections and SGR fix data from OACT projections of incurred costs and CBO projections. CBO's SGR fix assumes resetting the SGR Target at 2011 Spending Levels and using GDP +1% in Target. OACT’s SGR fix assumes that payment rates will increase at 1% per year.
CBO -0.8 -0.3  
OACT -0.6 0.0 2.7

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Culmulative Contribution of Aging and Excess Cost Growth to Medicare Spending Under OACT’s Alternative Scenario, 2013-2035
Year Spending No Age/Sex or Residual Effect of Aging Effect of spending no residual Effect of Residual Effect of total spending
Source: OACT
Note: Analysis assumes that physician payment rates increase at 1% per year from 2013-2035, and does not reflect the 0% update in the American Taxpayers Relief Act of 2012.
2013 3.59% 0.21% 3.80% -0.06% 3.74%
2014 3.59% 0.27% 3.87% -0.08% 3.78%
2015 3.59% 0.33% 3.92% -0.14% 3.78%
2016 3.59% 0.39% 3.99% -0.18% 3.80%
2017 3.59% 0.47% 4.06% -0.20% 3.86%
2018 3.59% 0.55% 4.15% -0.20% 3.95%
2019 3.59% 0.64% 4.23% -0.18% 4.05%
2020 3.59% 0.72% 4.32% -0.13% 4.18%
2021 3.59% 0.81% 4.40% -0.09% 4.32%
2022 3.59% 0.91% 4.50% 0.04% 4.54%
2023 3.59% 1.00% 4.60% 0.10% 4.70%
2024 3.59% 1.10% 4.69% 0.15% 4.84%
2025 3.59% 1.19% 4.78% 0.21% 4.99%
2026 3.59% 1.28% 4.88% 0.26% 5.14%
2027 3.59% 1.38% 4.97% 0.32% 5.29%
2028 3.59% 1.47% 5.06% 0.37% 5.43%
2029 3.59% 1.55% 5.14% 0.43% 5.57%
2030 3.59% 1.62% 5.22% 0.48% 5.70%
2031 3.59% 1.69% 5.28% 0.53% 5.81%
2032 3.59% 1.75% 5.34% 0.58% 5.92%
2033 3.59% 1.81% 5.40% 0.63% 6.03%
2034 3.59% 1.86% 5.45% 0.68% 6.13%
2035 3.59% 1.91% 5.50% 0.72% 6.22%

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